Take a look at the financial returns of Tag-It Pacific Inc. and it’s clear the Woodland Hills maker of apparel, zippers and fasteners is doing something right. The company’s year-to-date stock activity has skyrocketed 219.4 percent as of Nov. 15 the highest gain among the 50 largest publicly traded companies in the Valley. For the third quarter, the company reported net income of $339,000, or $0.02 per diluted share, a turnaround from a net loss of $10.3 million, or $0.56 per diluted share, just a year ago. Sales for the third quarter were up from $9.5 million during third quarter 2005 to $13.4 million. The quick about-face is the product of the company’s aggressive restructuring. “We spent the first year fixing the company and all of the things that were broken,” said CEO Stephen Forte, who came to the company last October after selling his Sherman Oaks-based Ascendent Systems, a Valley-based mobile device maker he founded years earlier. By the time Forte migrated to Tag-It, the company had lost about $30 million for the year. Forte said he quickly put into place a new management team and restructuring plan that included firing 171 employees, or 59 percent of Tag-It staff. He also closed plants in Mexico and South Carolina and opened offices in India, China, Bangladesh and Indonesia garment centers where Tag-It had been mostly absent. “We’re really focusing more in the Asian hemisphere where most of the apparel is being made nowadays and spending less time and assets in places like Mexico,” Forte said. He also took the bold step of getting rid of about 40 percent of its customers that were either slow in paying or not paying at all and eliminating underperforming products. The company replaced those customers with clients like Kohls, Express and Victoria’s Secret. The strategy has dug what was a moribund company out of the hole. For the first nine months of fiscal year 2007, Tag-It reported net income of $264,000, or $0.01 per share, up from a loss of $24.4 million last year. Forte, who has founded and later sold four companies over the years, said the immediate success is also a product of him treating the company differently from the tech firms he previously ran. “In one sense, it’s easier to operate,” he said. “It’s less about technology and more about strategy and people.” Forte said he expects the success to continue through 2007. “Our mode is to grow this business,” he said. Tis the Season for Delistings? Despite the prime gift-buying season and what should be a boon time for entertainment gifts, the Agoura Hills video-game maker THQ Inc. could be facing a rough holiday season. Last month, company shareholders filed a lawsuit in New York alleging some executives and board members backdated stock options, awarding options at artificially low prices in violation of myriad federal laws, not to mention its own ethics code. Calls to the New York City law firm handling the case were not returned, but a prepared statement from Stull, Stull & Brody said: “The practice results in lower payments to companies, results in those companies under-reporting compensation expenses, and permits directors, officers and/or executives to unjustifiably reap millions and billions of dollars which should be disgorged and returned to the corporate coffers thereby contributing to the financial health of the company.” THQ was dealt another blow Nov. 23 when it received a letter from Nasdaq warning it could be delisted because of irregularities in earlier quarter results. (THQ President and CEO Brian Farrell has previously said the company is investigating the issues.) The notice comes a few weeks after Calabasas-based Ixia, which makes interface cards, and tech maker 3D Systems Corp., which recently moved from Valencia to South Carolina, received similar delisting letters from Nasdaq. Another company facing delisting is Camarillo chipmaker Semtech Corp., although a Nasdaq panel said it will wait for the company to review its past accounting practices before a decision on the de-listing is made. More Strings The direct division of Westlake Village-based Guitar Center Inc. has purchased a bankrupt music retailer headquartered in South Bend, Ind. Guitar Center will pay $365.1 million for Woodwind & Brasswind, which filed for bankruptcy Nov. 21. Woodwind & Brasswind is the third-largest music instrument retailer in the country, with more than $136 million in sales last year. The deal, which awaits bankruptcy court approval, gives Guitar Center the company’s inventory of orchestral instruments, trade names and accounts receivable. Briefly The board of directors of The Walt Disney Co. decided to increase its annual dividend by almost 15 percent to $0.31 per diluted share. The Burbank company credited the strong returns to the successful television show “High School Musical” and films such as “Pirates of the Caribbean: Dead Man’s Chest.” IHOP Corp. has agreed to pay the Internal Revenue Service $11 million to settle a dispute over its historical tax treatment of franchise fees. The disparity affected federal taxes for the Glendale Company from 2000 to 2003. Calabasas homebuilder Ryland Group Inc. has increased its unsecured revolving credit facility from $750 million to $1.1 billion. The company said it might boost the facility to $1.5 billion if additional commitments are available. It matures in 2011. Staff Reporter Chris Coates can be reached at (818) 316-3124 or [email protected] .